Does Car Disposal Needs to Add to The JobKeeper GST Turnover? if The Car Is Partially Used for Business?

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  Aerith-Waifu on 01/08/2020 - 02:07

  https://www.ato.gov.au/Business/GST/In-detail/Rules-for-spec…

  In my understanding, the sale of the car should not be added to the GST Turnover of the business, it will rather go to G1 in the BAS Statement, say the car is sold for $10000 with business usage at 20%, the gst should be paid on the $2000 instead, which means the $2000 sale of the car should not be included to the JobKeeper Business GST Turnover? Am I correct or incorrect?

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  bemybubble on 01/08/2020 - 03:30

  The $2k will be included for the JK turnover test as it will be considered business income

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    Aerith-Waifu on 01/08/2020 - 04:28

    Just found this online:

    https://community.ato.gov.au/t5/COVID-19-response/GST-Turnov…

    Projected GST turnover and current GST turnover exclude the following:
    sales not connected with an enterprise that you carry on (for example, sale of private car)

    Would the car be considered private car even though $200 GST still needs to be paid when sold? Hence the $2000 not be added to the JobKeeper GST Business Turnover?

    • 

      bemybubble on 01/08/2020 - 07:52

      Only 80% of your car is private

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  spal on 01/08/2020 - 08:39

  Is the business conducted as sole trader or a company. If a company, and the car is owned by you as an individual, selling of the car will not be a relevant event for your business, But, if that is not the case, then too you have found the answer.

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    Aerith-Waifu on 01/08/2020 - 12:17

    Partership actually

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      spal on 01/08/2020 - 19:57

      If I understand correctly, the car is owned by you, and the business is a partnership. So, this is not even a business asset. I don’t think that you need to disclose anything. Even otherwise, based on your research itself sale of assets would not count towards the turnover calculations.

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        Aerith-Waifu on 01/08/2020 - 21:59

        Thanks for the input

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  loke on 01/08/2020 - 10:01

  It does appear to be included, see : https://www.ato.gov.au/Business/GST/In-detail/Your-industry/… and see : https://iknow.cch.com.au/document/atagUio512283sl15714690/gs… for calculating a decreasing adjustment

  Motor vehicle used to make financial supplies or for private purposes

  You may be entitled to a decreasing adjustment when you dispose of a motor vehicle that you purchased or used either:

  solely or partly for making financial supplies
  partly for business and partly for private purposes.

  The decreasing adjustment does not reduce the amount of GST payable on the sale of the motor vehicle, but reduces the amount of GST you are liable to pay for the tax period.

  The decreasing adjustment does not apply to either of the following:

  motor vehicles purchased before 1 July 2000 (the introduction of GST)
  motor vehicles purchased from 1 July 2000 to 23 May 2001 on which you could not claim GST credits (due to the GST Transitional Act).

  For practical purposes however, was the motor vehicle in the books of the business e.g. recorded as an asset and BAS at G10/1B GST previously claimed and then further depreciated? If no, I can see where the MV expenses could reasonably be claimed as being 'MV expenses reimbursed' (similar to paying MV expenses for an employee)

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    Aerith-Waifu on 01/08/2020 - 22:04

    The car isn’t part of the business assets as far as I know. But it did claim portion of the GST on the business usage when it was first bought. The depreciation is claimed once at 20% when the government has allowed instant write off at $20000 and nothing since. Car is registered under personal name, the business is under partnership.